Texas Commercial Lending: Bank of Austin gets its charter approved

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Texas Commercial Lending: Bank of Austin gets its charter approved

2page_img3-bigTexas commercial lender the Bank of Austin is the first newly chartered bank in many years, a development that may inject new life into the Texas economy.

The Bank of Austin will focus exclusively on serving the needs of local business owners. The Bank will “ strive to create relationships with those businesses and individuals that would prefer doing business with the Bank, rather than the branches of regional, national or international financial institutions,” according to the recently approved charter. The number of chartered banks, in both Texas and in the nation has declined since the Great Recession. Could the Bank of Austin represent a revival for community banking in the region?

The Bank of Austin is the first newly charted bank in the state of Texas in 8 years. The bank will focus exclusively on small business owners in Williamson and Travis counties. Its founders claim there is a lack of lenders specifically focused on small businesses in the area. State regulators apparently agree, which is why the charter was given the go ahead. Texas Banking Commissioner Charles Cooper said in a statement “the formation of this new state bank is a very positive sign that community leaders are again seeing the advantage of a locally owned and managed financial institution. The Texas economy needs a strong community banking system to provide credit opportunities to small businesses and consumers.”

The Bank of Austin intends to minimize overhead in order to offer a higher level of customer service. CEO Jon Eckert said “Most regional and large banks can’t financially justify using their most experienced, highly trained employees on smaller operations because the returns just aren’t’t there.” The Bank of Austin will remain at a single location for the first few years and will provide the majority of its services online. According to Eckert ,”The Bank of Austin is going to be a tech-focused bank in terms of our operations and delivery of services,” The banks use of technology will provide a new level of convenience for its customers and lower its operating expenses.

Can the Texas commercial lenders, succeed as they did in San Antonio?

The Bank of Austin founders hope to replicate the success of the Bank of San Antonio, another bank founded by the same group. The Bank of San Antonio began in 2007 with just 25 million dollars in initial investment, it now holds 698 million in total assets. The Bank of Austin seeks 40 million in initial investment, an amount that should cover the banks operating expenses for three years. The Bank of Austin’s founders believe that the banks simplified organizational structure will help them repeat the success they achieved at the Bank of San Antonio. Eckert said the bank “will only have an Austin agenda” and the group is “only focused on making sure we take care of clients in Austin and the surrounding area.”

Will the Bank of Austin’s one-on-one approach help it stand out among Texas commercial lenders?

Operations by the Bank of Austin will be centralized at one location for the foreseeable future. This factor and the use of technology will minimize overhead costs for the bank. With low expenses and a focus on customer service the banks founders hope to replicate their success at the Bank of San Antonio. But competition with alternative lenders is stiff. Online lenders have even lower overhead costs than the Bank of Austin. Will the Bank of Austin be able to keep up with the pace of innovation in the Fin Tech industry?


Dennis Dahlberg
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

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